Peg stability

RealFi ensures the stability of its USDr peg through a layered, mutually reinforcing defense architecture designed to withstand extreme market stress:

The Peg Stability Module (PSM) and arbitrage

The PSM is RealFi’s framework for maintaining USDr peg, active 24/7. The protocol maintains on-chain liquidity for USDr and mechanisms that continuously rebalance it around $1.00. If the market price of USDr deviates from $1.00 on a secondary decentralized exchange (DEX), arbitrageurs are financially incentivized to buy the discounted token and swap it back towards parity, naturally driving the price back up to the peg.

The on-chain stability fund

Acting as a dedicated stress reserve, this fund is held separately from the protocol’s routine liquidity operations and is capitalized by a portion of portfolio income retained by the protocol. The protocol’s standing liquidity, market makers, and arbitrage incentives form the first line of defense and – if these cannot close a deviation – the Stability Fund can directly intervene by purchasing and burning USDr from the open market until parity is restored and market confidence returns.

Dual-path redemptions and liquid reserves

To prevent catastrophic liquidity drains or "bank runs," RealFi maintains 10–20% of its Total Value Locked (TVL) in highly liquid U.S. Treasuries and money market funds. Redemptions follow a dual-path system:

Market makers use the PSM for near-instant swaps to anchor the peg, while institutional redemptions follow a separate queued, governed settlement process. Both paths enforce limits designed to protect reserve liquidity from sudden, massive outflows.

Behavioral incentives and circuit breakers

The protocol uses structural friction and incentives to encourage behaviors that support peg health. Mechanisms like staking returns, loyalty point multipliers (R-Points), and 7-day unstaking cooldown periods are utilized to discourage sudden mass exits.

In addition, automated circuit breakers will halt minting or slow redemptions if liquidity coverage approaches minimum thresholds.